IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/23389.html
   My bibliography  Save this paper

Regional Integration and Dynamic Adjustments: Evidence from a Gross National Product Function for Canada and the United States

Author

Listed:
  • Chapda Nana, Guy
  • Gervais, Jean-Philippe
  • Larue, Bruno

Abstract

We propose an empirical trade model to test for structural change and dynamic effects induced by free trade agreements for the Canadian and US economies. We estimated a translog Gross National Product (GNP) function along with output and factor shares and tested for structural change (abrupt or gradual) which is endogenously determined by the data. After this, we estimated Stolper-Samuelson (SS) and Rybcynski (R) elasticities, and assessed the stability of their sign and magnitude link to the structural change. The null hypothesis of no structural change is soundly rejected for both countries. For Canada, we found gradual structural change that started prior to the implementation of CUSTA and lasted for several years. In the US case, we found evidence of an abrupt structural change occurring in 1995, a year after NAFTA came into force. More interestingly, several SS and R elasticities experienced sign reversals and a magnification effect over the different sub-periods, implying that the categorization of goods in terms of friends or enemies of labour and capital changed during the transition.

Suggested Citation

  • Chapda Nana, Guy & Gervais, Jean-Philippe & Larue, Bruno, 2010. "Regional Integration and Dynamic Adjustments: Evidence from a Gross National Product Function for Canada and the United States," MPRA Paper 23389, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23389
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/23389/1/MPRA_paper_23389.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ulrich Kohli, 2003. "GDP Growth Accounting: A National Income Function Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(1), pages 23-34, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guy Chapda Nana & Bruno Larue, 2014. "Imposing curvature conditions on flexible functional forms for GNP functions," Empirical Economics, Springer, vol. 47(4), pages 1411-1440, December.

    More about this item

    Keywords

    GNP function; regional integration; structural change; smooth transition regression; dynamic adjustments.;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:23389. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.